Asahi Broadcasting Group Holdings Corporation

The Group's core Broadcasting Business depends on advertising revenue, and is directly affected by trends in the domestic macroeconomy and performance fluctuations at companies with large advertising expenditures. Japan's total advertising expenditure in 2025 rose 5.1% year on year to ¥8,062.3 billion (¥8.0623 trillion), and while internet advertising expenditure expanded 10.8% year on year, television advertising is under structural pressure due to changes in media contact patterns. As a countermeasure, in addition to maintaining and enhancing the value of the Broadcasting Business, the Group plans to pursue growth in the Content Business and Lifestyle Business, and to build a structure that enables the entire Group to respond to change.

If the Group fails to respond to the needs of viewers, advertisers, and society, it may become unable to continue producing programs that gain support, potentially having an adverse effect on management. Asahi Broadcasting Television Co., Ltd. and other broadcasting companies within the Group are working together to establish a program development structure, but there is a risk of delayed response to rapidly changing viewer needs. Going forward, the Group intends to proactively sense changes in viewer needs and society, and to explore new program production approaches not bound by conventional methods.

If erroneous reporting or problematic program content leads to major litigation or damages, it could have a material impact on the Group's reputation and adversely affect operating results and financial condition. The Group prevents such occurrences through internal oversight bodies such as program review councils and broadcast program review meetings, as well as employee training, but perfection cannot be guaranteed. The Group plans to continue strengthening its systems and training programs to establish a program production structure based on broadcasting ethics.

Technological innovation and the spread of IT have diversified the devices used for viewing video content, and internet video streaming services continue to significantly grow their user base, posing a major threat to the Broadcasting Business. While this situation also presents an opportunity to expand business as a content supplier, delayed or inadequate responses could adversely affect operating results and financial condition. The Group plans to maintain the value of terrestrial broadcasting while expanding its content business across the entire Group, building a structure that can flexibly respond to the new media environment.

The Group's Broadcasting Business is significantly affected by laws and regulations such as the Radio Act and the Broadcast Act, as well as by broadcasting administration by the government and regulatory authorities. Violations of laws and regulations could result in revocation of licenses or registration, or administrative sanctions, potentially having a material impact on business activities and operating results. The broadcasting license was renewed in November 2023 with a validity period of five years, and legal amendments could require new capital investment, potentially increasing costs. The Group strives to strengthen its internal control and compliance systems, and at present no facts have arisen that would constitute grounds for license revocation or refusal of renewal.

The Group holds personal information such as that of program performers and audience members, as well as information related to membership services, the shopping business, and Housing Business customers. If unauthorized access or unforeseen circumstances lead to an external leak, it could damage the Group's social credibility and adversely affect operating results and financial condition. The Group exercises great care in handling personal information, but complete prevention cannot be guaranteed. Going forward, the Group plans to utilize the latest digital technologies to thoroughly manage various data within the Group.

If broadcasting facilities or relay facilities are damaged by a large-scale earthquake, fire, power outage, or similar event, it could adversely affect operating results and financial condition; damage to business sites used in the Housing Business, Golf Business, and other businesses could also adversely affect business revenue. The Group conducts regular renewal and inspection maintenance of all facilities, but there is no guarantee that all disruptive accidents can be completely prevented or mitigated. The Group plans to maintain and strengthen its business continuity plan (BCP) to ensure employee safety and continuity of broadcasting.

Under the Broadcast Act, a company cannot be certified as a certified broadcasting holding company if foreign nationals and others hold one-fifth or more of the voting rights. If the Group fails to meet this requirement, it risks losing its status as a certified broadcasting holding company. At present, the voting rights ratio held by foreign nationals and others does not reach one-fifth, but depending on the behavior of foreign investors in the stock market, issues could arise in the future. The Group plans to continue monitoring the voting rights ratio of foreign nationals and others, and to take appropriate action as necessary to maintain its certification.

The Group actively pursues growth investments such as business alliances and corporate acquisitions, and if business profitability declines due to sudden changes in the business environment, there is a risk of losses related to valuation losses on securities or impairment of goodwill. There is also a risk that compliance or internal control deficiencies inherent in investee companies could adversely affect Group governance. The Group has established a structure and system for examining and discussing opportunities and risks in the investment process, and plans to make investments in line with the strategies for the content and animation domains set out in its medium-term management plan.

The Group applies accounting standards related to impairment of fixed assets, and if future environmental changes reduce expected future cash flows, additional impairment losses may need to be recognized, potentially affecting financial position and operating results. The Group regularly verifies whether the book value of assets can be recovered through future cash flows, and appropriately processes impairment for assets requiring such treatment. Amid rapid changes in the business environment, this is recognized as a risk particularly in the event that declining profitability of fixed assets becomes apparent in the Content Business and Lifestyle Business.